SC transportation bill ripe for political influence some officials worry

Some state highway commissioners are worried that political influence might be used in determining where some of the road money approved last week by lawmakers will go because of language in the bill.

But Don Leonard, chairman of the State Transportation Infrastructure Bank, told GreenvilleOnline.com that he doesn’t plan to look outside the projects submitted by the state Department of Transportation and sees no issues ahead.

The Legislature last week approved legislation and a budget that could ultimately raise more than $700 million for roads and bridges.

The biggest chunk of that comes from $50 million in recurring funding that would be routed through DOT to the Infrastructure Bank, which could issue bonds totaling about $500 million.

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While the legislation directs DOT to follow the state’s priority system — which uses objective criteria such as traffic volume to rank projects — to send eligible projects to the Infrastructure Bank, the legislation asks the bank board to consider what DOT sends it instead of mandating that it can only consider those projects and nothing else, commissioners say.

The issue isn’t just for highway commissioners. Gov. Nikki Haley on Monday said she is withholding any decision on whether to push for future transportation funding until she sees that the Infrastructure Bank follows the prioritization law.

“I don’t think they have to follow that but we’d like to see them follow that because I think Act 114 is critical to take the politics out of roadwork.”

Leonard, president and CEO of a Myrtle Beach real estate and investment firm, said he sees no problem.

“Details will have to be worked out but I don’t anticipate any issues,” he said. “I think it’s pretty clear that we’ve been asked to help DOT and welcome the opportunity to help DOT with their priority list of bridge replacements and interstate improvements.”

Leonard said as far as he is concerned, “We would simply respond to their request and determine how we could best help them with the least expensive financing.”

Max Metcalf, vice chairman of the bank board, said he has been out of the country the past two weeks and hadn’t been following the legislative debate.

But without knowing exactly what was in the legislation, he said he thinks the board will handle the issue properly.

“I think the Infrastructure Bank is going to be very responsible, as we have been in the past,” he said. “I understand, and I think the other bank board members understand, what the needs are to be addressed through the additional funds. We’ll need to have a meeting and talk about it.”

DOT’s board is so concerned that at a meeting last week members decided to seek a meeting with the Infrastructure Bank board, which Leonard said will happen this summer.

The money is routed through DOT because the bonds require non-tax dollars, so the agency provides that money.

The $500 million is to be used for bridge projects or for interstate expansion work.

Some lawmakers skeptical

Some lawmakers were skeptical of what the bank board would do because they say in the past the board has provided most of its funding to a small group of counties. Critics contend that politics has played a greater role than objective criteria in directing some of that funding.

But bank board members say recipients of funding over the years are those counties and communities which meet the bank’s two biggest requirements — a project size of at least $100 million and a local match of some type. Those requirements, bank board members have said, favor more urban counties and communities with a local option sales tax they can use for the match.

Since its inception in 1997, the bank board has dispersed more than $4 billion for 96 projects. Leonard said those projects were for 22 of the state’s 46 counties and five cities. Horry and Charleston counties received more than other counties in the state, GreenvilleOnline.com reported last year.

“Some counties have made more applications than others and all we can do is respond to applications,” Leonard said.

Charleston is the location of Interstate 526, an extension of which is the latest project to be funded by the bank board. The board voted to use future revenues to help finish the 8-mile, $550 million extension, a decision which stirred some controversy.

Senate Majority Leader Harvey Peeler was so concerned the bank board might try and use some of the new money on I-526 that he inserted language in the legislation to prohibit it being used on any project approved by the bank board before July.

Metcalf also pointed to that clause.

Edwards, who also sits on the bank board, said had lawmakers used the word “must” they could have removed any doubt.

“As long as the wording says we can recommend or for their consideration, that means once they get our recommendations, they can basically do what they want to,” he said.

State Transportation Secretary Robert St. Onge agreed that the bank board isn’t limited to Act 114.

“I don’t think the SIB has been told they have to follow any of the Act 114 criteria,” he told the DOT board. “Our job is to provide them the Act 114 list. That’s the conundrum that’s out there.”

Other questions

Commissioners have other questions as well, such as whether the bank board will seek a local match for any of the projects.

Leonard said his personal interpretation of the bill is that the local match requirement wouldn’t apply for the projects approved under the legislation.

“I see this as special financing that would apply just to his legislation,” he said.

Edwards said staffers will present to the DOT board lists of the top bridge and interstate expansion projects on the agency’s priority list and commissioners will then select the top projects to send to the bank board.

But some of those, including the second-ranked project, a 24-mile segment of I-85 near Greenville, and the third-ranked project, $533 million of work on I-526, are already in the six-year State Transportation Improvement Program and funded in that plan, said Ron Patton, DOT’s chief engineer for planning and design.

Patton said the number one ranked project, a $90 million plan to widen I-26 in Columbia, also comes with the needs to address some associated interchanges, labeled for years by local motorists as “Malfunction Junction.” The interchange work would cost more than $500 million, Patton said.

The priority bridge lists contains about $381 million of projects, including 33 replacement projects, according to a copy of the list obtained by GreenvilleOnline.com.

Of the replacement projects, 13 are located in the Upstate, including one in Greenville, a $2.2 million project over the dam at Lake Lanier.

Patton said all of the bridge projects are in the STIP. He said he expects most of what is recommended to the Infrastructure Bank to be interstate expansion projects.

Edwards said the hard part for the board will be deciding how to select the projects and how much of each to recommend funding.

“One project eating up all this is not exactly what I envision,” he said. “I’d like to spread it to different parts of the state. But I’d also like to do it under the rules we go by now.”

The legislation also provides using up to $50 million in surplus money on bridge work. That money could be matched four to one with federal funds, officials said.

Half the state’s annual vehicle sales tax revenues, minus some for education, are to be spent now on non-federal aid secondary roads, according to the legislation, about $41 million.